Wimm-Bill-Dann (Lawson e-Sales: Sales management of distributors)

Effective management of geographically distributed distributor network is strategically important task for Wimm-Bill-Dann. In 2008 in the company implementation of an information system "Lawson e-Sales started: Sales management of distributors". Today - it the solution can call some of the main instruments of implementation of strategy Wimm-Bill-Dann regarding management of secondary sales.

Summary of the project

Date of beginning / project finish: 2008-2009.

June, 2008 – October, 2008 – setup of a system, connection of pilot distributors, support of work within one month;

December, 2008 – October, 2009 – replication of the solution Lawson e-Sales within distributor networks Wimm-Bill-Dann Food and Wimm-Bill-Dann Drinks.

Main Objectives / Project tasks:

• Sales management of products Wimm-Bill-Dann through distributor network (sales of distributors in outlets / retail);
• Control of a remaining balance of products Wimm-Bill-Dann in warehouses of distributors;
• Control of receipt of products Wimm-Bill-Dann on warehouses of distributors.

Project scales:

• Several hundred users in different time zones (distributors + internal users Wimm-Bill-Dann);
• Several million transactions in the centralized DB monthly.

Architecture / Technologies / Services:

• Online work via the Internet in the centralized DB;
• Absence for project objectives any specialized program and the hardware on the platform of distributors;
• Electronic Data Interchange with hundreds of distributors;
• Standardization of all information within the centralized DB;
• An opportunity for distributors to work both in terms of the encodings of data, and in terms of the unified reference books Wimm-Bill-Dann;
• Service of creation of reports via the Internet for area managers Wimm-Bill-Dann and distributors.

Prerequisites of the Project

Toughening of the market competition led to the fact that each outlet became main "battlefield" between leading manufacturers of food and drinks actually – focus of attention of key players moved to the end consumer, and began to provide with task number one presence of goods "on the shelf", and it should be the "correct" range, in due time and in required volume. The option "ship for the future" essentially solves this problem, but is very costly – in all respects. Wimm-Bill-Dann selected the alternative solution - to increase effective management of distribution. And, "with accent" not so much on shipments to a distributive link (Sell In), how many for sales of distributors at retail (Sale Out).

It became obvious: the information solution capable to provide tracking of all logistics chain of the company – from the moment of shipment of products from warehouses Wimm-Bill-Dann before shipment of products by distributors to outlets is necessary. The "accumulator" of up-to-date information on secondary sales considering scales of business of the company and allowing daily was necessary and to within SKU to see to what outlets and in what volumes products go. It was important - instead of separate and not always absolutely authentic reports which were requested from distributors weekly – to obtain data quickly, in the necessary detailing, in different analysts, with a possibility of accumulation of history, etc.

Implementation of such information system had to become the first step to achievement of a strategic objective Wimm-Bill-Dann – to implementation of the concept of VMI according to which the producer controls each stage of accomplishment of a supply chain, and warehouses of distributors are replenished proceeding from the valid requirement on the basis of real demand. Such approach allows not only to reduce the level of warehouse stocks, but also to avoid risks of deficit of products in outlets and to increase service quality.

In 2007 Wimm-Bill-Dann started development of approach of implementation and search of the software product which would become the tool for implementation of business strategy of the company regarding supply chain management.

Choice of the software product

Optimal price relation and qualities, technological effectiveness, flexibility and scalability of the solution, ease and simplicity of settings sufficient for delivered (it is also desirable perspective) tasks functionality – for Wimm-Bill-Dann each of these requirements had critical value. Scales of business of the company and width of distributor network excluded all compromises – the solution answering to all listed above "conditions" was required.

Plus to that it was necessary to consider also the fact that each of numerous distributors is the absolutely independent and independent unit having the interests and the specifics of business. At the same time all of them are territorially distributed, and it means - different time zones and different communication quality. Each distributor has the developed IT infrastructure, the different accounting systems (regarding analytics of accounting, encoding of reference books, etc.), different level of training of IT specialists, etc. Besides, it was important that on the party of the distributor it was not required to do anything additional that it was not necessary to set any specialized software. Because, first, it is additional and very serious costs, and secondly, additional "irritant" for distributors. 

So, the main solution specifications for management of secondary sales were formulated: ease of use, reliability, profitability, flexibility (the solution had to correspond fully to business processes Wimm-Bill-Dann, "lay down" precisely on the fulfilled control algorithms distributors), the high performance and that intervention in "ancestral lands" of distributors was "not invasive".

Four suppliers approached the tender. Solution "Lawson e-Sales: Sales management of distributors" from BSC company was the only thing satisfying with everything requirements Wimm-Bill-Dann including:

• Online work via the Internet in the centralized DB;
• Absence for project objectives any specialized program and the hardware on the platform of distributors;
• Electronic Data Interchange with hundreds of distributors;
• Standardization of all information within the centralized DB;
• An opportunity for distributors to work both in terms of the encodings of data, and in terms of the unified reference books Wimm-Bill-Dann;
• Service of creation of reports via the Internet for area managers Wimm-Bill-Dann and distributors.

"It was the only solution which was based based on Internet technologies that allowed us to avoid costs for installation of the additional software based on distributors - it was point, important for us, as reduced our costs. And, at last, good technical support which is represented by BSC company influenced our choice too", - Gusakov Igor, the Director of the department of the commercial information, Wimm-Bill-Dann notes Food.

Main objectives of the project

When 37 enterprises produce hundreds of types of dairy products and tens of types of drinks under one brand – Wimm-Bill-Dann, and at each SBE more than one hundred active distributors through the whole country, to have "picture" of sales with a possibility of detailing on geography, to types of outlets, brands, tastes, volumes, etc. – it is extremely important. Only in the presence of such "picture" it is possible to manage distributor network - in the true sense of the word. Information, the analysis, outputs, actions – only in such sequence it is possible to manage effectively (especially in business scales Wimm-Bill-Dann), taking into account specifics and "nuances" at all stages of a supply chain. Thus, implementing solution based on Lawson e-Sales pursued accomplishment of the following key tasks:

• Sales management of products Wimm-Bill-Dann through distributor network (i.e. sales of distributors in outlets / retail);
• Control of a remaining balance of products Wimm-Bill-Dann in warehouses of distributors;
• Control of receipt of products Wimm-Bill-Dann on warehouses of distributors.

Existence of up-to-date and reliable data on Sell In sales - to shipments to distributors and Sale Out - sales by distributors of goods in outlets gives the chance to quickly monitor a situation in the market and to plan shipments and sales. Becomes possible "synchronize" primary and secondary sales that saves from need to make unnecessary goods and/or to hold an unnecessary drain. As a result – there is less working capital, it is more than current assets. At the same time the producer has a real opportunity to manage demand for the products. Exact information on "ukhodimost" from warehouses of distributors gives a clear understanding about preferences of the end consumer – taking into account regional specifics, a factor of seasonality, marketing activities, market conditions, price policy, etc. Thus, the producer himself decides what to sell where when and in what quantity, and the distributor actually assumes a role of the logistic partner whose purpose is high-quality distribution of a product to territories.

System implementation

In June, 2008 the BSC company started system implementation for sales management of distributors based on Lawson e-Sales in Wimm-Bill-Dann company. At the first stage tuning of a system was performed and pilot distributors are connected, within a month specialists of BSC performed support of work in a system. In October, 2008 the pilot project was successfully complete – all tasks set within it were solved just in time and with economy of the budget in 12%. Based on "pilot" in December, 2008 the second stage of the project - full-scale replication of the Lawson e-Sales system within the SBE Wimm-Bill-Dann distributor networks "Produkty Pitaniya" and SBE Wimm-Bill-Dann Drinks started. It means several hundred users in different time zones (distributors, plus internal users Wimm-Bill-Dann) and millions of transactions in the centralized DB monthly. Questions with providing high system availability for such significant amount of users did not stand - the solution "Lawson e-Sales: Sales management of distributors" is developed based on web technologies and initially expected large volumes of the processed information. The architecture of Lawson e-Sales includes three principal components:

• The Web server – implements functions of the user interface and provides access for users to a system;
• The application server on the basis of IBM WebSphere – is responsible for management of system business logic (all business logic is developed on Java);
• The database server under control of the Microsoft SQL Server – is responsible for data storage.

Each of listed above a component of the Lawson e-Sales system is decided to be placed on the selected hardware (i.e., on three servers). At the same time all program and the Lawson e-Sales hardware was placed on the platform Wimm-Bill-Dann that gives the chance to manage a system on a centralized basis. As for distributors to install any specialized equipment on their platforms need was not. "The fact that Lawson e-Sales are the cornerstone of web technology – big advantage, - Aleynikova Elena, the senior manager Wimm-Bill-Dann Drinks supervising from beginning to end the SaleOut project notes (as it is called in Wimm-Bill-Dann). – It saves from need to install on platforms of distributors additional software or the equipment. The Internet browser and actually Internet access – more nothing is necessary. The user logs in under the login and the password, at the same time each specific distributor has access only to that information which belongs directly to his company, as protection of data transmission the SSL certificate is used. Daily distributors unload in a system data in the stipulated format, these data actually instantly arrive to us on the server, on the basis of the acquired information the OLAP reporting with which several departments of our company, including logistics, trade marketing, sales work is under construction. And, to analyst on secondary sales we can receive the most various and in any detailing – up to what SKU in what day in what outlet it was sold and what type this outlet, the same concerns also information on a remaining balance in warehouses of distributors".

More detailed information on the solution "Lawson e-Sales: Sales management of distributors" can be received on BSC website: http://www.bsc-consulting.ru/solutions/e-sales/ 

The received results

Now we were convinced in practice that Lawson e-Sales is a flexible solution, easy in use. Now we have all necessary information on secondary sales. A system allows to perform detailed collecting and data analysis on work of distributors to within SKU, outlet and the sales representative, and report generation occupies a minimum of time and labor costs. I consider that we really received that we wanted: i.e. not just information system, but business solution for management of secondary sales which really works. It was especially pleasant that at all stages of project implementation we worked well-coordinated with specialists of BSC very much, one command. I can estimate this project as more than successful.
Popovic Silviu, CEO, Wimm-Bill-Dann Food'

I precisely know now what percent of shops has a full range of names which it should have. And on each specific position <...>, if I want to know precisely how many shops sell this product at present, I can learn it in five minutes. Earlier it would be just impossible. For us Lawson is a tool for creation of economy, increase in efficiency of the working capital and - step by step – it leads to simplification of our work with distributors.
Sobel Hary, CEO, Wimm-Bill-Dann Drinks'

At the moment all planned pool of distributors Wimm-Bill-Dann Food and Wimm-Bill-Dann Drinks is connected to a management system for sales of distributors of Lawson e-Sales. Daily from different corners of the country from distributors up-to-date information on secondary sales which is consolidated in the single database Wimm-Bill-Dann arrives (and, distributors can provide required data in terms of the codings – in a system the tables of a mepping allowing to lead automatically them "to one denominator" with terms of the unified reference books Wimm-Bill-Dann are implemented).

Among the main results there are implementations "Lawson e-Sales: Sales management of distributors" can be selected the following:

• Opportunity in details to keep track of efficiency of holding marketing actions (as sales volume on outlets and the nomenclature after holding actions changes);
  
• An opportunity to implement sales planning and to manage work of distributors on a basis not only financial, but also quantitative indices;
  
• An opportunity to implement replenishment action in warehouses of distributors by the principle of VMI (Vendor Managed Inventory). Thus, distributors become not just trade, but logistic partners whose purpose is the product delivery to the end consumer (in outlet);
  
• Control of representation of products in outlets (if there are sales of the distributor according to the specific nomenclature in outlet, this nomenclature means it is provided);
  
• The operational and management reporting on work of distributors with very high detailing (to within outlet, SKU, the sales representative, the primary document, etc.) and on any timepoint in scales of all business.
  

"It, of course, gives effect, first of all, on cost reduction, - Igor Gusakov, the director of the department of the commercial information notes Wimm-Bill-Dann Food. - Secondly, now we can manage distributors: i.e. the distributor from the company selling becomes our logistic partner, i.e. ourselves solve what product should be in the distributor's warehouse, our exclusive commands agree about sales, and as a result the role of the distributor actually comes down to delivery of this product directly in outlet".